Introduction
The growth of satellite communications illustrates how this technology meets basic human and economic needs. This is because of the ability to bring the technology quickly and cost-effectively to provide basic communications services in particular data transmission.
Some large corporations, mostly in the US, have built their own network based on the most recent satellite technology: the Very Small Aperture Terminal (VSAT). Over 85% of all systems sold have been in North America with more than 60,000 VSATs installed or on order in 1991. Two-way VSAT networks are becoming more common in Latin-America where it is sometimes the only way to provide reliable data networks. Private companies are being licensed by the national telecommunication operator or the Government to run VSAT services.
The following list gives an indication of where are the VSAT networks in 1991 (source: Hughes, October 7, 1991):
USA 55
Brazil 5
Mexico 5
Germany 5
Canada 4
Australia 4
Thailand 4
Italy 4
China 3
Taiwan 3
Indonesia 2
Philippines 2
India 1
Malaysia 1
Argentina 1
Peru 1
Belgium 1
France 1
Spain 1
Sweden 1
UK 1
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71 20 14
of which 12 in Latin America
Latin America represents an ideal territory for the use of VSAT networks as it by-passes the need to raise substantial capital investment unlike fixed terrestrial networks. From an investment point of view VSAT technology is attractive, because of its incremental character to bring on-line a nationwide network in a short timescale. VSATs provide a bearer mechanism for reliable nationwide data networks as well as international extension.
REDALC is a project which will attempt to establish a private communications network for use by academic institutions within, as well as throughout, Latin-American countries. This network will make use of satellite technologies and services for providing lower-cost and higher quality data communications. The target system will provide an infrastructure to carry data applications such as electronic mail, computer conferencing and general access to remote computer resources.
This report will focus on the necessary steps to implement a VSAT network in Latin America. It will address three main issues: who can operate, who can supply space capacity and terrestrial equipment for such a network technology. A first section will recall what can be done with the technology. The final section constitutes the backbone for a deeper study that could be conducted through a Request For Quotation process. It is assumed that the reader knows about that technology.
VSAT network use
The ability to establish reliable communications with remote locations that are served inadequately by terrestrial services remains the main advantage of the VSAT networks. They can be used either for full duplex (two-way) communications, or simplex (one-way) communications. There is a wide range of potential VSAT uses, which fall into three broad categories:
- One-way information distribution which is used to broadcast from a central site to a large number of remote locations. Business (/corporate) television and financial information services are typical of that usage. This is not what REDALC plans to use.
- Data collection based on two-way communications where remote locations equipped with VSAT are polled from a central, resource monitoring and remote sensing in meteorology are typical of that usage. This is not what REDALC plans to use.
- X.25 network emulation in support of interactive data applications which is what REDALC plans to implement.
a VSAT network is the most common alternative implementation to:
- leased line services (whether analog at 9.6 or 19.2 kb/s, or digital at 64 kb/s and up), in particular multipoint configurations when available,
- packet data services on X.25 networks.
Terrestrial networks based on leased lines, typically priced on both bit rate and milage, are:
- highly sensitive to the distances between the remote locations and the central site,
- also sensitive to traffic increase, as it remains difficult to vary bit rates coming in discrete speeds (9.6, 19.2, 64kb/s, ...),
- and growing almost linearly with the number of remote locations.
Packet data services on X.25 networks, typically priced on volume, are:
- highly sensitive to traffic increase, but conversely, insensitive to distance within the limit of international service availability,
- and growing almost linearly with the number of remote locations.
VSAT networks are:
- moderately sensitive to traffic increase,
- absolutely insensitive to distance, almost independent of the number of remote locations.
VSAT network deployment
The use of satellite communications technologies by private users is on the move. However, the market is not yet fully mature due to the reluctance of the Public Telecommunication Operators to undermine their existing services. Three steps (or conditions) are necessary to put in place a private network based on VSAT technology:
- it is necessary to get a license to operate the network, so the use of such a technology would be easier in countries where the regulations allow such licensing,
- then, it is essential to find a satellite with the right footprint and a power compatible with the operation of a VSAT network,
- and finally, the equipment procurement should be realized in the target area, so it is important to determine who can provide VSAT technology in Latin America.
How to get a license?
One of the greatest problems for establishing a VSAT network is the access to the space segment and its cost. Direct access to the space segment is a much desired aim but remains a long term hope even if telecommunications regulations are changing rapidly around the world. Varying, but largely chaotic, degrees of deregulation exist in Latin America. A licensing regime has paved the way in some countries for a fast exploitation of VSATs to improve the chronic telecommunications problems of Latin America.
At this time, very few organizations have licences to operate VSAT networks and provide VSAT services in any Latin America country. There is virtually no way to accurately estimate the amount of time it may require to get a licence within a country. It should be stressed that there should be one license per country covered by the network.
Therefore, the best possibility could be to get the service from somebody who has already licences. The options for doing that are few. The next sections will examine the situation in countries where the regulatory situation has sufficiently evolved.
Argentina
The telecommunications structure changed in 1990. The state owned operator, ENTEL, was privatized. Domestic Switched services are now operated by two operators:
- Telecom Argentina, owned by ItalCable SPA of the Italian STET group, operates in the northern part of the country and northern Buenos Aires,
- Telefonica de Argentina, owned by Telefonica de Espana, operates in the southern part of the country and southern Buenos Aires.
Both companies own Telintar S.A. (Telecommunicationes Internacionales de Argentina). Teleintar owns a teleport giving access to IBS from INTELSAT on its satellite located at 53° west (INTELSAT V-A).
Licenses were also introduced for separate companies to offer packet data networks. The major players are:
- Dynamic Systems who gives access to IBS from INTELSAT. This company leases, operates and maintains IBS earth station at customer premises.
- SATELNET operates a teleport in Buenos Aires for domestic satellite services using capacity in the C-band on INTELSAT V-A (53° west). From that teleport equipped with a 9 meter INTELSAT standard-Z antenna, SATELNET can provide point-to-point configuration between Buenos Aires and remote locations equipped with 3.8 meter antennas.
- IMPSAT operates a teleport in down-town Buenos Aires for domestic satellite services using the capacity purchased by Argentina in the C-band on INTELSAT V-A (53° west). From that teleport equipped with an 11 meter antenna, IMPSAT can provide star network configuration between Buenos Aires and remote locations equipped with 1.8 meter antennas from Hughes. Point-to-point configuration is also available on larger dishes at remote sites (2.4 to 3.8 meters). Hughes VSATs are partially manufactured in Argentina. 250 VSATs are already operational out of the 500 ordered in 1989.
Brazil
EMBRATEL established in 1965 is responsible for the interstate and international services. EMBRATEL operates two domestic satellites: BRASILSAT I and II. EMBRATEL also participates in the INTELSAT consortium.
A number of Brazilian financial institutions are in the process of installing networks similar to Banca Serfin (see section on Mexico).
Chile
In the old state controlled days there was two Chilean public operators with a clear division of responsibilities:
- Empressa Nacional de Telecomunicaciones (ENTEL) in charge of international links and trunk services,
- Compañia de Teléfonos de Chile (CTC) in charge of the local networks and services.
Privatisation of both CTC and Entel took place in 1989. Now, two operators are providing satellite based services through INTELSAT:
- SATEL Telecommunications SA (owned by both ENTEL, the Chilean signatory to INTELSAT, and a subsidiary of COMSAT in the US) operates a teleport (near Melipilla 100 km from Santiago) equipped with an 18 meter INTELSAT standard A antenna. SATEL uses capacity on INTELSAT V-A (53° west) for providing access to international IBS from INTELSAT. SATEL is also planning to implement VSAT service in Chile.
- Chilesat, a branch of the Telecomunicaciones de Chile, offers both domestic and international IBS from INTELSAT. Chilesat operates a teleport in Santiago equipped with two antennas: a 15.2 meter standard A pointing on INTELSAT VI (27.5° west), and a 7.3 meter standard F-2 pointing on INTELSAT V-A (53° west). Domestic IBS service is on INTELSAT VI F4. Chilesat also offers VSAT service from a shared hub located in Santiago.
Columbia
Telecom, the Colombian signatory to INTELSAT, has stimulated the development of domestic VSAT networks:
- a one-way VSAT network for Radio de Columbia is using a hub located in Bogota.
- Integrated Satellite Telecommunications System (STSI) is a private network designed for the country's major oil companies. The network, planned to be operational in 1992, will get its capacity on INTELSALT VI F4 (27.5° west). Both IBS and Intelnet services will be used.
Mexico
A number of private VSAT networks are already operational in Mexico:
- Mexico City's Universidad Guanajuato is using a VSAT network from Scientific Atlanta to link 10 campuses across the country.
- Aurrera, Mexico's super market and department store chain also equipped by Scientific Atlanta.
- Banca Serfin will use Scientific Atlanta equipment. This will be one of the largest VSAT network in Latin America as it will connect 172 branches to the Mexico city head quarter and four regional offices.
- Mexican Airlines based on Hughes VSAT technology with a hub at the airline's Mexico city headquarter and VSAT remote stations in 34 cities.
- Organizacion Editorial Mexicana (Mexico's largest publishing company).
Peru
Silver and copper mines (30 sites) are linked through a VSAT network from Hughes that utilizes satellite capacity on PanAmSat.
Who is providing the space segment?
The solution is independent of which earth segment equipment is chosen. The choice of the satellite depends mostly on the coverage target and the type of application (Data Communications or Television Broadcasting).
However, the earth station need to be low cost and therefore must have a small size (below 3 meters). Only satellites with high enough effective isotropically radiated power (EIRP) can fit such a requirement (over 40 dBW in the Ku-band). The choice remains presently limited over Latin America. But, the introduction of more competition for international services should provide an alternative to INTELSAT while pushing INTELSAT to compete for domestic networks. At the end, this should provide the user with lower cost for both international and domestic services.
As seen in the previous section, INTELSAT Business Service (IBS) and Intelnet are playing a key role in the provision of space capacities to licensed operators. IBS mostly provides capacity in increments of 64 kb/s. 14 countries in Latin America provide access to international IBS through 33 different earth stations (or shared-hubs). IBS starts to be used in support of domestic connections. Intelnet provides a full or fractional transponder lease service in support of user designed networks with a minimum 100 kHz increment up to 72 Mhz in C- and Ku-bands. These services are now available on the new generation INTELSAT-VI since 1990 which represents a sizable increase in both power and capacity.
INTELSAT-K (21.5° west), previously known as SATCOM K-4, will also represent an opportunity for providing more capacity over Latin America. INTELSAT-K provides high-power Ku-band capacity for video and VSAT services. Many combinations are available for interconnecting the beams. However, the two South American beams which could be fed from North America or Europe, cannot be fed from South America. Satellite capacity will be offered from 100 KHz to a full 54 MHz transponder.
INTELSAT-VII will be introduced in 1993 in replacement of the previous generations in particular the INTELSAT-VA located at 53° west. It means greater power at both C- and Ku-bands providing EIRP high enough to service the smallest VSAT, as well as a better coverage of Latin America in particular Argentina.
Latin America is no longer limited to the INTELSAT satellite system:
- Alpha Lyracom operates a satellite called PanAmSat-1 located at 45° west. Since January 1992, PanAmSat-1 has been renamed ORBX-1. One of the three beams of ORBX-1, covers Latin America in the C-band since June 1988. The Latin Beam extend from Florida to the southern tip of South America. Two transponders are reserved for data services including VSAT networks. It should be noticed that Alpha Lyracom operates a Hughes shared hub in Florida for services in the Caribbean and Latin America. Alpha Lyracom has ordered three satellites to Hughes in order to increase its capacity (ORBX-2, 3 and 4).
- HISPASAT operated jointly by Telefonica de Espana (Telecommunication) and Retevision (Television broadcasting), will also provide a Latin Beam in the Ku-band.
Domestic satellite systems are also available in Brazil and Mexico: BRASILSAT and MORELOS respectively. Both BRASILSAT and MORELOS will reach the end of their life in 1994. MORELOS will be replaced by Solidaridad, and BRASILSAT by BRASILSAT-II.
Who is providing earth segment equipment?
The license to operate a network and the capacity on a satellite are two key elements more from regulatory point of view than from a cost point of view. Their costs remain relatively marginal compared to the cost of the earth segment: the space segment does not exceed 20% of the overall cost, and competition in the satellite services should bring it close to 10% which is the observed level in the US where competition is high for the space segment offer. The licensed operator giving access to the space segment makes a mark-up on the satellite service cost. This mark-up can be high (50%) but again affects only 10 to 20% of the overall-cost. The earth segment cost remains the major component of the overall cost. They are also few possible choices:
- Hughes Network Systems (HNS); the VSAT leader world-wide, close to 70% of the two-way VSAT market and more than 50% of both two-way and one-way VSAT market.
- Scientific Atlanta (SA); large, successful reputable supplier in the US market today considered as number two behind Hughes.
- AT&T Tridom; large, successful reputable supplier and fast growing outsider.
- GTE SpaceNet; large, successful reputable supplier in the market today remarketing different VSAT technologies.
- Alcatel Telspace; very limited market penetration in two-way VSAT market.
This group of five could be considered as the world leaders in VSAT. Most of the other names are in most cases remarketing products from this group, such as:
- Dornier; a subsidiary of Daimler Benz, builds equipment under Hughes licence.
- Matra in venture with Marconi, builds equipment under ATT-Tridom licence.
Addresses could be found in the attached directory.
The largest single cost component in a VSAT network remains the hub. The cost of a hub ranges from $ 1 to 3 millions. The higher the number of remote locations equipped with a micro station (VSAT) that share this high cost, the lower the cost per remote site.
The cost of a micro-station varies from $ 7K up to $ 15K. The earth segment of a VSAT network could be estimated at:
- $ 1000K + N x $ 6K ($ 7K per site for 1000 sites for a lower case)
- $ 3000K + N x $ 15K ($ 18K per site for 1000 sites for an upper case)
There are already two types of hubs, the maxi-hub and the mini-hub. The maxi-hubs are mostly used for providing shared services due to their sizes and costs. Shared maxi-hubs are mainly used in the so-called Teleport. A teleport is made of at least one maxi-hub shared by several customers. Several hubs are used when the space segments are not all on the same satellite. Mini-hubs, based on non-redundant systems, could be used at customer premises due to their size (up to 6 meter antenna) and their cost (about K$ 300).
Traffic assumptions
Based on the ITU year-book of statistics (1980-1989), the following data are available (18 countries):
Country Main Lines/100 Leased DTE/ Year
Lines Inhabitants Lines PSDN
Brazil 8 852 540 6,01% 24 760 1 570 89
Mexico 4 702 439 5,77% 90 040 2 100 89
Argentina 3 057 512 9,58% 2 365 89
Columbia 2 070 360 6,72% 16 314 88
Venezula 1 457 771 4,89% 13 368 88
Chile 625 466 4,89% 1 120 381 88
Ecuador 531 895 5,07% 57 89
Peru 530 674 2,44% 3 819 165 89
Uruguay 375 830 12,72% 89
Cuba 304 107 2,89% 89
CostaRica 256 521 8,95% 453 89
Panama 201 044 8,48% 170 89
Bolivia 168 852 2,50% 1 460 89
Trinidad 161 110 13,24% 365 88
Guatemala 158 840 1,76% 89
Paraguay 94 380 2,30% 53 88
Jamaica 84 530 3,58% 115 108 88
Belize 15 254 8,67% 19 89
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The Dominican Republic is estimated at 300.000 main lines in 1989. Derived from the above figures, the population open to connection through the REDALC project has been estimated at:
- 3% of the main lines for countries with a density less than 5% of main lines per 100 inhabitants,
- 2% of the main lines for countries with a density between 5 and 10% of 100 main lines per 100 inhabitants,
- 1% of the main lines for countries with a density above 10% of main lines per 100 inhabitants,
This arbitrary estimate gives the following quantity of people who generates in average 10 bits per second, (assumption made in 1991 at the first REDALC meeting):
Country Users Outgoing Cum.
potential Traffic
Brazil 177 000 177 Kb/s 177
Mexico 94 000 94 Kb/s 271
Argentina 61 000 61 Kb/s 332
Columbia 41 000 41 Kb/s 373
Venezula 29 000 29 Kb/s 402
Chile 18 000 18 Kb/s 420
Ecuador 10 000 10 Kb/s 430
Peru 15 000 15 Kb/s 445
Uruguay 4 000 4 Kb/s 449
Cuba 6 000 6 Kb/s 455
CostaRica 5 000 5 Kb/s 460
Panama 4 000 4 Kb/s 464
Bolivia 5 000 5 Kb/s 471
Trinidad 2 000 2 Kb/s 473
Guatemala 5 000 5 Kb/s 478
Paraguay 3 000 3 Kb/s 481
Jamaica 3 000 3 Kb/s 484
A user generates 10 kilo bytes per day (10 hours). So, in average 12 kilo bits per hour: 3,33 bits per second. The busy hour is assumed to be 3 times the average, so that during the peak hour, a user generates 10 bits per second. The traffic is assumed to be balanced.
Last but not least, most of the traffic is assumed to be in support of an electronic mail application. The research community being presently connected through Internet type technology, the electronic mail application is naturally SMTP (Single Mail Transfer Protocol). Being accustomed to this environment, the other applications popular over TCP/IP are supposed to play a role. A typical Internet traffic pattern is given below:
FTP 24%
SMTP 21%
Telnet 17%
ICMP 8%
other 30%
This pattern should be considered as ultimate on REDALC as presently the poor level of connections limit the use of such facilities to non-interactive traffic (80% electronic mail).
Recommendations
VSAT networks are prevalent in markets where domestic satellite capacity is available; some level of deregulation exists; and exiting terrestrial networks are not adequately available and/or reliable. These conditions are the pre-requisites to a successful deployment. Then, should be identified who can supply the earth equipment and satellite capacity.
In light of the few possible choices for the provision of the earth segment, it is recommended to work straight with the leading equipment providers who are no more than five: Hughes, Scientific-Atlanta, ATT-Tridom, GTE and to a lesser extent Alcatel-Telspace. The equipment suppliers can respond to a Request For Quotation (RFQ) in which they will provide a complete network design and its associated cost. They all know who can provide the satellite capacity and at which price that partly depends on their engineering options, so that they can also determine the bare cost of the space segment. The only missing cost would be the mark-up by the licensed operator who would give access to the satellite capacity. Even if this mark-up can widely vary, its variation affects no more than 10 to 20% of the overall cost. The choice, if any, of the licensed operator giving access to the satellite capacity, is more political than financial.
The countries where the regulations are more favourable should be selected to start a nation-wide network always easier than an international one due to the complexity of dealing with many different regulatory bodies. Argentina, Mexico and to a lesser extent Brazil, are the prime candidate for such a development. The selection of Argentina would further stress the role of Hughes due to the existing technology transfer agreement. Scientific Atlanta is also well positioned in Mexico.
So, this report recommends to use a Request For Quotation (RFQ) process for the design of the overall REDALC network. The RFQ should be sent to at worst the five leading suppliers in earth segment equipment. The selection of the licensed operator remains of lesser importance and could wait the early results of the RFQ process.
Request For Quotation Process
REDALC plans to provide a set of networking solutions to the research community in Latin-America. The tentative date for an operational service is presently fixed for year-end 1993. REDALC is issuing a request for quotation to refine its vision of the service to be provided initially. The responses to the RFQ are expected by year-end 1992. An request for pricing (RFP) will be issued three months after the compilation of the RFQ.
The RFQ process covers two types of uses for the VSAT technology corresponding to the hirarchical structure of the planned REDALC solutions:
- the possibility to build a domestic network for the connection of the research community within a given country,
- a regional network for the connection of the domestic networks whether existing on terrestrial infrastructure or to be built according to the above describe domestic REDALC solution.
These two levels of networking solutions by REDALC could be viewed as an alternative to inexistant solutions or as a complement to inefficiant existing solutions. A domestic network will be based on the star VSAT technology while the regional newtork will be based on the meshed VSAT neywork.
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